I think there were "evasive" because they had different streams of development, and they didn't know what would succeed technology wise.I am sure they tried their hardest to implement 43rds lenses on micro bodies with good AF, but kept an E7 development stream to be a fail-safe.Who knows until the specs get leaked 2 weeks before release.

...simply putting the EM5 sensor and IBIS into an E5 body and calling it an E7 would have done wonders, yet so many make it out as an impossibly difficult and expensive task.

Well, then you have people complaining about it being exactly that -- some E-M5 parts stuck into the E-5 / E-3.

Recall the arguments about what improvements were present in the E-5 (particularly the argument over 'moire' vs. resolution) then extrapolate to an 'E-7' with the updated sensor and IBIS only, at US$1700.

People (quite reasonably) expect a 'flagship' model to offer more than less expensive models. Terada also seems to be indicating that they are working on improving AF performance:

'For those users AF speed is important and a suitable finder is necessary. And also it needs to be the right size - the benefit of Micro Four Thirds and Four Thirds is compact size. We have to provide those things to benefit those users. One of the benefits of DSLR is continuous autofocus. In this respect, we have to promise total AF performance in future.'

And, of course, they will likely re-use the E-M5 sensor with whatever processing improvements they have figured out in the interim:

They can be confident about image quality, he says: ''They already know image quality from the OM-D. Four Thirds and Micro Four Thirds sensors are the same size, so they can imagine that.'

The E-x line needs to differentiate itself a bit more to make standard FourThirds cover a different photography usage area. If they can put a really good C-AF system in place, then that coupled with their high-performance long telephoto zooms becomes a credible system again for wildlife shooters. The E-M5 sensor loses little if anything to the current APS-C variants, so the AF performance seems the remaining weakness.